MoneyGram International Inc. MGI reported fourth-quarter 2019 adjusted income per share of 1 cent, which compared favorably with the Zacks Consensus Estimate of a loss of 2 cents. The metric was in line with the year-ago quarter figure.
MoneyGram’s results reflect transaction growth outside the United States.
The company’s total revenues of $323.7 million declined 6% year over year and missed the Zacks Consensus Estimate by 1.3%. The downside mainly resulted from a decline in fee and other revenues along with investment revenues.
Among the components of revenues, fees and other revenues declined 6.2% to $311.3 million, while investment revenues declined 11.4% to $12.4 million.
Adjusted EBITDA of $57.6 million declined 4% year over year.
Adjusted EBITDA margin of 17.8% improved 40 basis points year over year.
Total operating expenses declined 6% year over year to $311 million due to lower total commissions and direct transaction expenses, expenses related to transaction and operations support, expenses related to occupancy, equipment and supplies, and depreciation & amortization expenses.
Segments in Detail
In the Global Funds Transfer segment, money transfer revenues decreased 6.3% year over year to $299.7 million. Within the segment, money transfer revenues declined 5.6% year over year to $285.9 million and Bill payment revenues were also down by 17.9% year over year to $13.8 million. Operating margin deteriorated 30 basis points from the year-ago quarter to 1.8%.
The Financial Paper Products segment reported total revenues of $24 million, down nearly 8% year over year due to a 9.5% decline in money order revenues and a 6.5% decrease in official check revenues. Operating margin improved 150 basis points from the year-ago quarter to 33.3%.
The company ended 2019 with cash and cash equivalents balance of $146.8 million, up 0.9% from the 2018 end-level.
During the quarter, the company generated adjusted free cash flow of $19.8 million, down 6.2% year over year.
As of Dec 31, 2019, its pension liability was up 1.2% from the 2018-end level to $77.5 million.
For 2019, adjusted diluted income per share was 3 cents per share on a reported basis.
For the year, total revenues of $1,285.1 million decreased 11% on a reported basis and 10% on a constant currency basis.
Global Funds Transfer segment’s revenues were $1,183.3 million, down 12.2% from the 2018-end level.
Adjusted EBITDA of $213.7 million declined 13% on a reported basis and decreased 11% on a constant currency basis.
Adjusted free cash flow totaled $62.4 million, down 38.2% from the 2018-end level.
On a constant currency basis, the company estimates total revenues of $300 million and adjusted EBITDA of $50 million for the first quarter of 2020.
Zacks Rank & Stocks to Consider
MoneyGram currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players in the same space having reported fourth-quarter earnings so far, the bottom-line results of CIT Group Inc. CIT, Moody’s Corp. MCO and American Express Company AXP surpassed estimates in the last reported quarters by 14.4%, 4.2% and 1.5%, on average, respectively.
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